Judge orders ‘mini-trial’ in photography copyright infringement case

A federal judge in Philadelphia has granted a defense motion to bifurcate a copyright

infringement case in which the plaintiff, a photography business, alleges the defendant illegally infringed on a massive number of the plaintiff’s works.

On May 7, U.S. District Judge Michael Baylson, sitting in the Eastern District of Pennsylvania, agreed to bifurcate the case of Grant Heilman Photography Inc. v. The McGraw-Hill Companies Inc. and John Does Printers 1-10, setting the stage for what the court calls a “mini-trial” that would enable the parties to present their respective claims and defenses for a small sample of the alleged infringements, which total an impressive 2,395.

Grant Heilman claims in its lawsuit against McGraw-Hill that more than 2,000 discrete acts of infringement relating to 1,002 photographs licensed through 594 invoices issued between 1995 and 2011, the court record shows.

McGraw-Hill subsequently raised a statute of limitations defense to a large majority of the claims, but in late November of last year, the court denied the defendant’s motion for partial summary judgment on the statute of limitations issue, finding that the defendants claim that the plaintiff had constructive notice of the infringing activity was a factual question that could not be decided as a matter of law.

The defendant then filed its motion to bifurcate, a move opposed by the plaintiff.

Prior to a hearing on that motion, the court reached out to the attorneys in the case to seek their respective views on a variety of issues, such as the prospect of proceeding with a “mini-trial” in which the defendant would have the opportunity to get a jury decision on a representative sample of the plaintiff’s claims that it argues are barred by the statute of limitations, while the plaintiff would have the chance to obtain a jury decision on a limited number of its infringement claims for which there are no statute of limitations defenses, according to the judge’s memorandum.

Following the hearing, Baylson had to determine if the defendant met its burden by showing that a separate trial would “expedite and economize” the case, the judge wrote.

In the end, Baylson determined that the mini-trial would, indeed, be the best approach.

“Holding a separate trial to determine whether Plaintiff should have discovered Defendant’s allegedly infringing activities prior to April 18, 2009, would dramatically narrow the scope of discovery/trial if the jury rules in Defendant’s favor,” the judicial memorandum states.

In the complaint, Grant Heilman Photography states that 67 percent of the alleged infringements involved copyrights that the plaintiff licensed to the defendant prior to the first alleged “storm warning,” while 95 percent involve copyrights that Grant Heilman licensed prior to the last alleged warning.

Baylson’s memorandum says that a jury verdict on the statute of limitations issue would promote the interest of “efficient judicial administration,” which is the “controlling” consideration at factor under the Rules of Civil Procedure.

The plaintiff argued against bifurcation, claiming that it would result in substantial evidentiary overlap, unnecessary costs and delay, and prejudice.

But Baylson wrote that the plaintiff’s arguments have been rendered mostly moot by the court’s mini-trial approach.

“Whereas Plaintiff’s arguments were based on the premise that the first trial would require discovery and evidence for every one of the 2,395 alleged infringements (involving 594 invoices), the mini-trial approach will limit discovery to 30 invoices, which is neither unwieldy nor unreasonable,” Baylson wrote. “Under principles of collateral estoppel, if the jury finds that storm warnings placed Plaintiff on notice of the alleged infringements that occurred prior to April 18, 2009, the scope of discovery and evidence for the second trial would be dramatically narrowed.”

The judge further wrote that the “sheer magnitude of judicial resources that could be saved by this approach warrants, in the Court’s view, the relatively modest costs and delay that the mini-trial will produce.”

In his order, Baylson gave the plaintiff one week’s time in which to select 24 invoices to be used for discovery, and he gave the defendant the same amount of time in which to gather together six invoices.

Witness depositions were ordered to be completed by July 30, and the plaintiff was told to serve its expert reports by Aug. 15, with the defendant’s response due one month later.